Welcome to the FHA Webinar on:

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Welcome to the FHA Webinar on

• Adverse Events Principles to Consider When
  Adopting a Non-Reimbursement Policy

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Speakers

• Bill Bell, FHA General Counsel
• Kathy Reep, FHA VP/Financial Services
• Kim Streit, FHA VP/Healthcare Research
  Information Services
• Chris Sorensen, VP/Corporate Risk Manager
  Corporate Compliance Officer, Health First

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PRINCIPLES FOR IDENTIFYING SERIOUS ADVERSE
EVENTS FOR WHICH PAYMENT OR PARTIAL PAYMENT MIGHT
BE WITHHELD

• The error or event must be preventable.
• The error or event must be within the control of
  the hospital.
• The error or event must be the result of a
  mistake made in the hospital. 
• The error or event must result in significant
  harm.
• The error or event must be clearly and precisely
  defined in advance.

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Medicare Policies on Adverse Events and
Hospital-Acquired Conditions
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Distinguishing Events All Adverse Events vs.
Other HACs

• Most hospitals do not currently bill for serious
  adverse events
• CMS has longstanding policy on serious adverse
  events such as wrong site/wrong procedure
• Addressed as not medically necessary
• CMS initiating National Coverage Determination to
  review Medicare coverage of three never events
• Surgery on wrong body part
• Surgery on wrong patient
• Performing the wrong surgery on a patient

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Distinguishing Events All Adverse Events vs.
Other HACs

• Policies are not so clear for some HACs
• Issue of discussing charge process in voluntary
  manner vs. under state mandate
• Antitrust concerns if done in collateral manner
  vs. unilateral discussion between single provider
  and payer

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Present on Admission Reporting

• Applied to principal and secondary diagnoses, as
  well as external cause of injury codes
• Applies to condition clearly present, but not
  diagnosed, and those known at time of admission
• Time the order for inpatient admission occurs
• Inconsistent, missing, conflicting, or unclear
  documentation must be resolved by the provider

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Present on Admission Indicator
Definition Yes No No information in the
record Clinically undetermined Exempt from POA
reporting
Code Y N U W Unreported/not used
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Hospital-Acquired Conditions

• Provision of Deficit Reduction Act of 2005
• Secretary to identify at least two conditions
• High cost, high volume, or both
• Reasonably preventable
• Assigned to higher paying DRG when present as
  secondary diagnosis

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Hospital-Acquired Conditions

• Reporting effective for Medicare claims 10/1/07
  required 1/1/08 claims returned 4/1/08
• Effective FY2009, higher DRG not paid unless the
  condition was present on admission

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HACs Resulting in Reduced Medicare Payment for
FY2009

• Pressure ulcer stages III and IV
• Falls and trauma
• Vascular-catheter associated infection
• Catheter-associated urinary tract infection
• Administration of incompatible blood
• Air embolism
• Foreign object unintentionally retained after
  surgery
• Surgical site infection after bariatric surgery
  for obesity, certain orthopedic procedures, and
  bypass surgery
• Deep vein thromboses and pulmonary emboli
  associated with knee and hip replacements
• Certain manifestations of poor glycemic control

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Medicare Implementation of Payment Reductions

• Limited savings predicted by CMS
• 20 million per year
• Determination driven by present on admission
  codes
• Issue of electronic standard for POA reporting
• Payment adjusted in those cases with U or N
  indicator attached to diagnosis code
• Rate only impacted when HAC is single
  complication on the claim

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Impact of Payment Adjustment for
Hospital-Acquired Condition
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What are other payers doing?
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Medicaid

• Florida Medicaid will deny claims for codes with
  three of identified conditions beginning 7/1/08
• Object accidentally left in after surgery
• Air embolism
• Blood incompatibility
• CMS letter to State Medicaid Directors
• Guidance on coordinating State Medicaid payment
  policies with Medicare policies
• Medicaid as a secondary payer should follow same
  approach to avoid payment liability for treatment
  where Medicare will not pay by including a
  general statement in the Medicaid State Plan
  governing hospital reimbursement.
• AHCA has not yet determined their approach

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Aetna

• Adds definition of Never Events or serious
  reportable events
• Extremely rare medical errors that should never
  happen
• Iidentified by the National Quality Forum (28
  events) http//www.qualityforum.org/pdf/reports/sr
  e/txsreexecsummarypublic.pdf
• Under Notices and Reporting
• Requires hospital to notify at least one of the
  following agencies within 10 days that a Never
  Event has occurred
• Joint Commission
• State reporting program for medical errors
• Patient Safety Organization
• Must perform a root cause analysis and identify
  changes tp improve patient care systems and
  processes
• Must apologize to the Member and/or the Members
  family
• Hospital will waive all charges related to the
  never event

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Blue Cross Blue Shield of Florida

• BCBSA national policy announced in November 2007,
  pushing affiliated plans to no longer pay for
  serious errors and hospital-acquired conditions.
• BCBSFL
• Claims processing procedures apply the CMS
  guidelines for Preventable Conditions for
  Medicare Plans
• Discussing further policies in the area of
  payment for adverse events

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CIGNA Policy

• October 1 implementation
• Purpose
• Improve hospital reporting
• Reduce of events
• Assist member in becoming more informed on
  hospital quality issues
• Align practices with CMS
• Three components
• Never events
• Wrong side,wrong body part, wrong procedure,
  wrong person
• Not medically necessary - no reimbursement and
  cannot bill member
• Avoidable hospital conditions
• Coding of present on admission

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CIGNA Avoidable Hospital Conditions

• Those conditions that could reasonably have been
  prevented through application of evidence-based
  guidelines and are not present at time of
  admission
• Adopts CMSs HACs and adverse events
• ends payment for extra care resulting from HAC
• pays at the lower DRG rate if not POA and is the
  only major complication/comorbidity reported
• CIGNA will rely on the POA codes to determine
  must submit POA indicator on all claims submited
  on and after 10/1/08
• Will review admissions with identifiable adverse
  events and HAC as part of their continued stay
  review.
• If additional days which directly and
  exclusively resulted from a HAC not POA,
  reimbursement for additional days will be denied

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Coventry/Vista

• Adverse event monitoring policy 23 adverse
  events
• Direct staff to refer any of their list of
  adverse events to the Medical Director
• Review inpatient claims quarterly
• Medical director review of cases
• Concurrent review
• Member complaints
• Administrative claim reports
• Monitor to identify patterns of preventable
  events and events related to individual providers

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Humana

• Preventable conditions/Never Events
• Apply the CMS guidelines which adjusts payment
  and MS-DRG assignment
• No additional payment if condition is acquired
  during hospitalization
• Requires reporting of all secondary diagnoses
  that are present on admission
• Never Events are those defined by NQF
• No payment is due by Humana or member

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The Question Billing vs. Reimbursement/Non-Paymen
t
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CMS Billing Instructions for HACs

• Federal Register 8/22/07
• The additional costs that a hospital would incur
  as a result of a hospital-acquired complication
  remains a covered Medicare cost that is included
  in the hospitals IPPS payment. Medicares
  payment to the hospital is for all inpatient
  hospital services provided during the stay. The
  hospital cannot bill the beneficiary for any
  charges associated with the hospital-acquired
  complication.

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CMS Billing Instructions for HACs

• The hospitals total charges for all inpatient
  services provided during the stay will continue
  to be used to determine whether the case
  qualifies for an outlier payment.

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Coding Guidelines

• AHIMA does not condone the omission of codes from
  the claim because it misrepresents the clinical
  picture of the patient encounter
• Standards of Ethical Coding Diagnoses or
  procedures should not be inappropriately included
  or excluded because payment or insurance policy
  coverage requirements will be affected.

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Points to Consider

• Can you remove charges from the claim and not
  adjust associated costs on the cost report?
  Results in overstatement of CCR
• Should adjustment be contractualized rather than
  simply reversing charges?
• Should lost or contractualized charges and costs
  be assigned to specific departments?
• What about the physician claim?
• Can you simply not bill an account?
• Is claim submitted even if charges adjusted
  completely? Concern for encounter data

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Chris Sorensen

• Principles to Consider
• when Identifying Events

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Questions Answers
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Thank you for participating!